Abstract

The “great divergence” of America's rich from its middle class and poor has led some observers to see a country increasingly stratified by income and wealth, more so than by race.

In this article, the first in a two-part series, we argue that this conclusion overlooks the persistent importance of the racial “structure” of inequality.

A decomposition of income inequality between 1980 and 2010 using the Theil Index shows that inequality between racial groups accounts for a rising share of total income inequality over this period nationally and in most states.

We also demonstrate that within-state trends in the between-race component of inequality are not fully accounted for by trends in income inequality and racial diversity per se.

These findings lay the groundwork for a forthcoming companion piece in Social Science Quarterly that shows that between-race inequality is strongly linked to welfare policy outcomes in the United States.